The Next 800 Pound Gorilla in Small Business Networked Storage? Interview with Iomega President Jonathan Huberman Part 1 of 3

Direct attached storage often still predominates in small businesses, but as networked storage becomes more affordable and the management of it becomes easier and simpler to perform, network hard drives and network attached storage (NAS) appliances are poised to become much more pervasive. Recently Jerome Wendt, DCIG’s Lead Analyst and President, met with Jonathan Huberman, President of Iomega as well as the Consumer and Small Business Products Division of EMC, to discuss Iomega’s growing role in networked storage for small businesses and other similarly-sized work groups. In this first of a 3-part series, Jonathan examines current trends in networked storage for small businesses, how Iomega is differentiating itself from competitors and what advantages being a part of EMC brings to Iomega.

Jerome: What trends are you seeing today with network storage for small business? And how does Iomega define “small business”?

Jonathan: The definition of small business today is in the eye of the beholder. Historically, we have defined the small business market, which has been a core target market of ours, as businesses with between 1 and 100 users. Now as part of EMC, we have the technology and sales wherewithal to expand our target market. This year we will come out with networked storage products that not only target businesses with 1 – 100 users but also for the 100 – 350 user range.

In terms of trends we are seeing, it is no surprise that small businesses are being stretched. In today’s hypercompetitive environment, small businesses and other work groups are looking at how to do more — in terms of working more effectively with fewer resources and less time. So for obvious reasons, small businesses are moving to a centralized networked storage system.
 
With networked storage, important files are kept in one location where anyone who needs information can get to it. It also makes it easy for these small businesses, remote offices and similarly-sized work groups to copy, back up and protect their data.  These small business entities typically lack substantial IT support, so you often have business people trying to be a network architect.  Consequently, the solution must be very simple, and since budgets are usually tight across the board, it must also be cost-effective.

Iomega StorCenter NAS products leverage EMC LifeLine™ software to make network storage simple yet powerful for small business. By bringing together this combination of EMC’s world-class, enterprise-level technology and Iomega’s understanding of the needs of small business, we can solve the same types of problems that exist in businesses of every size.  

Jerome: How is Iomega positioned to compete and differentiate itself in a crowded small business network storage space? What kind of history does Iomega have with small business storage?

Jonathan: For better or for worse, every market that Iomega competes in is crowded but we’re used to operating in this type of environment. However if you look at who the major players are, I would say that there are a handful that we compete with on a regular basis, not dozens.

In terms of Iomega’s history, small business has been our core market since 1980. Products like Bernoulli and Zip were to a large degree targeted at small businesses. Certainly some large businesses and many consumers used these as well, but our core customers were small firms like dentists, lawyers, accountants and creative agencies — and these are the same audiences we’ve targeted for the last 28 years. Iomega launched its first network-attached storage product about six years ago; today, we’re ready to help the tens of millions of small businesses utilize networked storage.

Iomega is very different today than it was a year ago. A year ago, we were we were effectively a “Me-Too” product. We had a small team and no fundamental technology of our own. We were really just taking direct attached drives, adding a fairly vanilla Linux stack on top of it, a network chip set, and leveraging our channels and brand.

Now as part of EMC, the world’s leader in storage technology, that is very different. Iomega’s advantage is that we can take the technologies that EMC has spent literally billions and billions of dollars to create or acquire. In just the last year, EMC spent about a billion and a half dollars on R&D to solve network and data storage problems. We now have the ability to leverage all of the appropriate technologies and investments that EMC has made and bring those to the small business in a manner that is easy to use and cost-effective for them.

Jerome: What are the advantages of being part of EMC as it relates to network storage solutions for small business?

Jonathan: Clearly the most important thing about being part of EMC is the access to technology. Being the consumer and small business products division of EMC is an enormous help and differentiator for us. Our customers have only started to see the difference that can make, since we’ve only been a part of EMC for 6 months now.
 
Second, being part of a company with $8 billion in cash and no debt gives us the flexibility to do things that aren’t possible as a $400 million company. None of our competitors look like us. Rather, they look a lot like the “old” Iomega in terms of size and scope. Now we have the balance sheet to become the 800-pound gorilla in this space and I expect we will become that in the foreseeable future.

The third advantage is EMC’s enterprise sales force, which expands our reach – not only within geographies where we already had a presence, but into also new geographies and markets. Historically, Iomega has had a very small footprint in Asia and Eastern Europe and no footprint at all in Africa. That’s changing. EMC’s geographic presence and very significant assets around the world are valuable assets to our business.

One more thing. When I talk about technologies, one item that can get lost are our sister divisions. Decho (EMC’s cloud division), Documentum, RSA and VMware are all sister divisions, so we can now partner with them in new and interesting ways. We just did not have that opportunity before and none of our competitors have that opportunity in the same way that we have it.

In the second part of this 3-part series, Jonathan describes Iomega’s NAS product offerings and how large corporations can leverage that to more cost-effectively store, protect and manage that data in their remote offices as well as how any size businesses can more easily build and deploy video surveillance solutions.

In the final installment of this 3-part series, Jonathan describes what enterprise features are finding their way onto Iomega NAS appliances, how Iomega provides investment protection for products purchased now and what Iomega will look like in the coming 2 to 5 years.

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